White House officials said yesterday that the federal government could help struggling General Motors and Chrysler through quick bankruptcies if the two automakers are unable to restructure themselves outside of court.
GM has 60 days to come up with a new restructuring plan while Chrysler has 30 days to decide if it wants to proceed with its Fiat partnership (after which they will receive $6 billion). President Barack Obama said that the U.S. government will back warranties of GM and Chrysler vehicles so consumers can feel confident buying American made cars.
According to Automotive News, a “surgical” bankruptcy could be accomplished with support from the U.S. Bankruptcy Court to change contracts and restructure debt so the two automakers can quickly become viable.
Sources said that it is too early to provide an estimate on how much it would cost the U.S. government to save GM inside our outside of Chapter 11 bankruptcy.
– By: Omar Rana